The benchmark Stoxx Europe 600 Index rose 0.4 percent to
281.81 at the 4:30 p.m. close in London, after earlier falling
as much as 0.5 percent. The gauge dropped yesterday as oil
climbed above $105 a barrel in New York after forces loyal to
Libya’s ruler Muammar Qaddafi repelled a rebel attack on the
central city of Sirte.

“We have enormous pressure from the commodity side at the
moment,” said Andreas Lipkow, an equity trader at MWB Fairtrade
Wertpapierhandelsbank AG in Frankfurt. “The ECB and the Fed
have to react right now and have to raise interest rates.
Investors are very nervous and the way central banks will
formulate the next steps is very important.”

ECB council member Axel Weber said he doesn’t want to
correct market expectations for as many as three quarter-point
increases this year in the bank’s benchmark interest rate. ECB
President Jean-Claude Trichet yesterday said that the world’s
central bankers are united in their aim to prevent surging oil
prices from fanning broader inflation.

Oil Falls

Crude fell in New York after Kuwait’s Oil Minister
confirmed that the Persian Gulf country has held talks to boost
production. Organization of Petroleum Exporting Countries are
holding “consultations” and have yet to decide to raise
output, Sheikh Ahmad al-Abdullah al-Sabah said.

National benchmark indexes increased in 13 of the 18
western European markets today. The U.K.’s FTSE 100 Index and
Germany’s DAX Index both rose less than 0.1 percent today, while
France’s CAC 40 Index gained 0.6 percent.

“Telecoms is our preferred defensive sector as we think it
offers greater potential for a positive growth surprise as well
as offering a substantial dividend yield boost over other
sectors,” strategists led by Morgan Stanley’s London-based head
of European equity strategy Graham Secker wrote in a report.

Deutsche Telekom Gains

Deutsche Telekom soared 4 percent to 10.01 euros. Europe’s
largest telecommunication company by sales has held talks to
sell its T-Mobile USA unit to Sprint Nextel Corp. in exchange
for a major stake in the combined entity, said people with
knowledge of the matter.

European stocks earlier retreated as Greek government bonds
slid, driving the yield on the 10-year security to the highest
level since Bloomberg began collecting the data in 1988. The
yield jumped as much as 48 basis points to 12.82 percent, while
credit-default swaps insuring Greek government bonds rose 5
basis points to an all-time high of 1,037.

National Bank of Greece, Greece’s biggest lender by market
capitalization, slid 6.8 percent to 6.15 euros. Eurobank and
Alpha Bank SA lost 6.1 percent to 4.30 euros and 4.3 percent to
4.69 euros, respectively. Moody’s Investors Service yesterday
downgraded Greece’s government bond ratings to B1 from Ba1, and
assigned a negative outlook. The Greek equity market was closed
for a holiday yesterday.

Andritz Surges

Andritz jumped 4.6 percent to 64.38 euros. The Austrian
maker of machines for the paper and steel industries reported
full-year net income of 179.6 million euros ($249.8 million),
beating analysts’ estimates. Andritz also forecast that its 2011
sales will “increase substantially compared to 2010” and that
its profit will rise.

Aegon NV (AGN) rose 1.4 percent to 5.60 euros, erasing
yesterday’s decline after Scor SE (SCR) was said to be in talks to buy
Dutch insurer’s Transamerica Reinsurance unit, according to four
people with knowledge of the matter.

Scor dropped 2.2 percent to 20.61 euros as the company said
that catastrophes in Australia and New Zealand will cost it a
total 200 million euros, net of retrocession.

Lundin Petroleum AB (LUPE) surged 4.4 percent to 83.10 kronor
after BofA Merrill Lynch Global Research upgraded the company to
“buy” from “sell.”

Wacker Chemie AG (WCH) climbed 2.9 percent to 138.40 euros as UBS
AG lifted its recommendation on the chemicals company to “buy”
from “neutral.”

Randgold Resources Ltd. (RRS), a producer of the metal in West
Africa, sank 8.2 percent to 4,480 pence, the biggest decline in
the Stoxx 600. Ivory Coast President Laurent Gbagbo took control
of local purchases and exports of cocoa and coffee, escalating
his conflict with rival Alassane Ouattara, the internationally
recognized winner of November’s election.